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Systemic risk, macroprudential policy frameworks, monitoring financial systems and the evolution of capital adequacy

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  • Arnold, Bruce
  • Borio, Claudio
  • Ellis, Luci
  • Moshirian, Fariborz

Abstract

This paper analyses various issues that need to be tackled when promoting financial stability, reviewing the progress made in certain key areas and the remaining challenges. It explores the measurement of systemic risk and of individual institutions’ contribution to it. It discusses aspects of macroprudential frameworks, including how the countercyclical capital buffer envisaged in Basel III takes into account the properties of the financial cycle and the strengths and weaknesses of macro-stress tests. It analyses some of the challenges of how best to monitor financial systems and the broader economy in order to detect signs of vulnerability that might lead to future bouts of financial instability and of how to set prudential policy accordingly. And it discusses the evolution of capital adequacy standards and the new emphasis on liquidity standards in international regulation.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Banking & Finance.

Volume (Year): 36 (2012)
Issue (Month): 12 ()
Pages: 3125-3132

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Handle: RePEc:eee:jbfina:v:36:y:2012:i:12:p:3125-3132

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Web page: http://www.elsevier.com/locate/jbf

Related research

Keywords: Systemic risk; Macroprudential polices; Monitoring financial systems; Capital adequacy;

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References

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  1. Reinhart, Carmen M. & Rogoff, Kenneth S., 2009. "The Aftermath of Financial Crises," Scholarly Articles 11129155, Harvard University Department of Economics.
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Citations

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Cited by:
  1. Reinhart, Carmen M. & Rogoff, Kenneth S., 2009. "The Aftermath of Financial Crises," Scholarly Articles 11129155, Harvard University Department of Economics.
  2. Lengnick, Matthias & Krug, Sebastian & Wohltmann, Hans-Werner, 2012. "Money creation and financial instability: An agent-based credit network approach," Economics Working Papers 2012-15, Christian-Albrechts-University of Kiel, Department of Economics.
  3. Olivier Bruno & André Cartapanis & Eric Nasica, 2014. "Bank Leverage, Financial Fragility and Prudential Regulation," GREDEG Working Papers 2014-12, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
  4. Itai Agur, 2011. "Bank Risk within and across Equilibria," DNB Working Papers 305, Netherlands Central Bank, Research Department.
  5. Rodrigo César de Castro Miranda & Benjamin Miranda Tabak, 2013. "Contagion Risk within Firm-Bank Bivariate Networks," Working Papers Series 322, Central Bank of Brazil, Research Department.

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